Hopefully, it won't. First of all, we have no idea how the remastered version will look like [unless I'm missing something, but the E3 presentation did not show a thing], so having an alternative that is as close to the original material as possible, yet slightly improved, will always be a good idea.

Second, the remastered version is coming to exclusively to PlayStation 4 and PlayStation Vita. The Deluxe version has slightly different goals. It is meant to improve upon the existing version, and allow us to play it on a wide range of platforms.

In my opinion, there's no point in shutting the project down, as it doesn't compete with the remastered version. Residual isn't available on PS4 and Vita, and since it's 2014, and Fandango remaster has Disney involved, it might become a new game altogether.

I'd like to know exactly what will be remastered. I wouldn't mind them doing full 3D environments, as long as the original look and feel is preserved. At this point, consoles are capable of producing those backgrounds in real time, though the Vita might have to use some tricks.

Either way, I hope the work on Deluxe version will continue. New models are in Grim Fandango played via Residual what filters are in ScummVM; a visual improvement [unless you love them pixels like I do, and you wouldn't use a filter to save your life].

Morden is right. We could be in for a Monkey Island: Special Edition-style remake, or even something so far removed from the original that people will still want to play the old version instead. Let's see how it turns out before we even consider ending the project (but hopefully it WILL be awesome!).

It is not a PS4/Vita-exclusive, more platforms are coming, according to @timoflegend.

I saw the second tweet later, so it's a timed exclusive then. Still, we don't know anything at this point, and no matter what this "remastered version" turns out to be, it's completely unrelated to the custom character models of the Deluxe edition.

Moreover, there is no conflict of interest to speak of. For years now, ScummVM has been used commercially. Revolution used it for their re-releases, GOG and DotEmu used it for classic games, etc. With that in mind, I can't see why a remastered Grim Fandango would affect anything related to Residual, just as publishing a remastered version of Broken Sword did not affect ScummVM.

If ID were to publish a remastered version of Doom or Quake, would it affect the community of map and model makers? Sure, ID approaches this in an entirely different manner, with source code releases, etc., but you get my point. Residual is just a way of playing the original game on modern computers, under Win, Linux and on Macs. The Deluxe project is a collection of fan-made character models, which are meant to be used with Residual. This is so far detached from the announced remastered edition, that I wouldn't be surprised if people involved in it haven't even heard of this.

(...) he is gonna incoorporate some of the enhancements into the GF Remaster version

That's interesting, to say the least. This would mean it won't be a full out remake, but a port with some enhancements thrown in. And that's what a remaster is, really. Still, I'm eagerly awaiting official news and details. People are probably asking the same questions on the Double Fine forums, so hopefully we'll get an answer soon.

It's a reference to the point and click mod. AFAIK the same guy that did the point and click mod to ResidualVM was hired to do the same on the (some better textures and only Audio) Remastered version recently released